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The Role of Banks in Shaping Income Inequality: A Within‐Country Study

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  • Paolo Coccorese
  • Roberto Dell'Anno

Abstract

This paper investigates the role of banks in shaping income inequality. We extend the current literature on the banking–inequality nexus by examining a sample of 103 Italian provinces for the period 2000–2018. We find that a higher banking development decreases income inequality. From a methodological viewpoint, we aim to contribute to the current literature by both adjusting the index of income inequality for the presence of tax evasion in income data and applying different estimation approaches to control for endogeneity. Some policy implications emerge from the findings of this study.

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  • Paolo Coccorese & Roberto Dell'Anno, 2024. "The Role of Banks in Shaping Income Inequality: A Within‐Country Study," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 70(1), pages 129-153, March.
    • Handle: RePEc:bla:revinw:v:70:y:2024:i:1:p:129-153
    DOI: 10.1111/roiw.12629
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